HARVARD BUSINESS REVIEW 17 Hours Ago
by Rob Cross
by Rob Cross | 8:00 AM July 9, 2013
By now, most HBR readers should understand the informal influence that stems from being central to an organization’s network. Well-connected people have enormous power to drive change, as this recent article from Julie Battilana of Harvard Business School and Tiziana Casciaro of the University of Toronto’s Rotman School of Management, makes clear. But, when a company has only a few network-central players, they can become significant points of weakness.
Consider the situation faced by a leading provider of outsourcing and information technology consulting services with approximately $1.5 billion in revenues and 10,000 employees spread across more than 70 offices globally. The company wanted to move to a matrixed structure, with globally integrated business lines and vertical practices working in conjunction with regional sales groups. The idea was to increase the focus on clients, improve flexibility and scalability, eliminate redundancy and excess costs, accelerate growth and profitability, and improve career opportunities.
But network analysis revealed that the company had a long way to go. Information flowed through hierarchies; geographies and functions operated in silos; most people weren’t aware of expertise elsewhere in the company; and few were collaborating to transfer best practices and help clients. The 5% most central people — despite working to their limits — had in various ways become bottlenecks, unable to fully participate in projects, sales efforts and decisions. And if you took them out of the network, the number of relationships in the company would drop by 29%!
Management responded by launching a number of connectivity-improving initiatives. First, they developed an expertise locator to help people find resources across the organization instead of passing requests up the hierarchy. Second, they offered educational sessions on topics such as service offerings, delivery experience, and rules of engagement between regions and business units. Third, they established global teams of subject matter experts. Finally, they emphasized a new culture of responsiveness by encouraging employees to return calls and e-mails within 24 hours regardless of the information-seeker’s title or position. Rather than further overloading the small set of people in the center of their network, leaders worked to lessen their load. They pushed decision-making responsibilities down to other levels and prompted other employees to become more central.
That freed up those who were already highly networked to help steer change. For example, the head of client services began to draw on the people that network analysis showed to be central in each region, which helped her understand who knew what much more effectively than meetings with those higher in the formal hierarchy could.
Six months later, the results were impressive. Network connectivity was much more evenly distributed and the most central people were much more responsive. There was 17% increase in ties to and from people in the periphery, many of them client-facing, which improved service and account penetration. And the ratio of employee ties external to their functions to all connections increased by 13%. Sales collaborations up to $500,000 increased by 27%; those between $500,000 and $2 million were up 15%; and those in the $2 million to $10 million range got a 9% boost.
The lesson? People central to your organization’ network can help you. But you need to make sure they’re not hurting you first.